Strategic orientation of servitization in manufacturing firms and its impacts on firm performance

Yong Lin, Jing Luo, Petros Ieromonachou, Ke Rong, Lin Huang

Research output: Contribution to journalArticlepeer-review

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Abstract

Purpose
The purpose of this paper is to provide implementation insights and implications regarding the strategic orientations of servitization by testing its impacts on firm performance, including financial performance and customer service performance.

Design/methodology/approach
Empirical research is conducted using an online survey disseminated to manufacturing firms in Southeast China. This research develops and verifies a strategic fit framework to understand the relationship between the strategic orientation of servitization and service innovation (SI), and its resulting impacts on firm performance.

Findings
The results show that service orientation (SO) has direct positive impacts on firm performance in the manufacturing sector. Customer orientation (CO) and learning orientation (LO) have no direct impact on firm performance, although they have indirect impacts on it via the mediating role of SI capability. Moreover, SO has a similar indirect impact on firm performance via SI capability.

Research limitations/implications
The survey focuses only on China; future studies should verify whether different cultural backgrounds impact the research results.

Practical implications
The results suggest that firms should build up three strategic orientations (SO, CO and LO) for implementing servitization to facilitate SI capability and, thus, to improve firm performance.

Originality/value
This research contributes to enhancing the theory of servitization by developing a strategic fit model of servitization and revealing the impact mechanism of servitization in the manufacturing sector.
Original languageEnglish
Pages (from-to)292-316
JournalIndustrial Management & Data Systems
Volume119
Issue number2
DOIs
Publication statusPublished - 21 Feb 2019

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